Saturday, 30 December 2017

As Financial
Regulation Matters ends its first year, this post will review some of the
main themes that have emerged (or persisted) over the last year. With nearly
200 posts since starting in February, it will be too much to review each post,
but assessing the themes that have been discussed throughout the year will be
useful; in what is a turbulent era politically and socially, understanding the
role that financial regulation plays in that arena, and how that arena affects
the development of financial regulation, is of interest. With that in mind, we
will look at some of the main stories that have been discussed in Financial Regulation Matters from within
a few specific areas: fraud and corruption; industry developments; social and
political developments; and lastly developments for financial regulators.

Fraud and Corruption

As the world (particularly the Western World) comes to terms
with the devastating Financial Crisis and its ensuing effects, fraud and
corruption has consistently come to the fore within the business media. In this
respect, there have been two particular categories that have emerged, with each
having a significant impact upon the field of business, and society moreover.
The first category we will look at is the issue of systemic fraud and
corruption, and nowhere is that demonstrated better than in looking at the
massive stories of money laundering and the financial practices of the elite.
Following on from the revelations stemming from the law firm Mossack
Fonseca – the so-called ‘Panama Papers’ leak - the year started with
revealing investigations into the actions of HSBC, who were identified
as having particularly lax anti-Money Laundering (AML) systems in place,
with that story being followed in the summer by the journalist-led
investigation into what was termed the ‘global
laundromat’. The ‘global laundromat’, which described a network of banks
around the world laundering money that emanates from Russia, took on added
significance with the political aspect of American-Russian relations continuing
to teeter on the edge; whilst national regulators sought to address concerns at
banks domiciled in their own regions, the fact that over 700 banks from more
than 90 countries were implicated pointed towards a systemic problem that also
demonstrated an underlying understanding that legal and illegal financial
procedures operate almost simultaneously, if conducted in an opaque enough
manner. This was continued with the massive story (that would not go on to
survive too many news cycles, in truth), in which files from the offshore law
firm Appleby had its documents leaked – the so-called ‘Paradise Papers’ leak.
The leak saw the elite’s business practices publically displayed, with members
such as the British Royal Family, Business leaders like Robert Kraft, and
celebrities such as Madonna having their investment practices revealed. Whilst
there was plenty of commentators keen to make the distinction between
tax-avoidance and tax-evasion, the short-term effect was for the public to
negatively react in relation to the pain being felt by the general public at
this time of continuing austerity. However, the extent of that reaction, and
the media coverage of it, was to be extraordinarily limited, and there may be a
number of reasons for that. Before we get to those reasons, there were plenty
of instances of corporate fraud, bribery and corruption that deserve a mention
over the past year.

In the U.S., their largest actions have come in relation to
the massive
trade-related confrontation that began in the aerospace industry with the
trade battle between Boeing, Bombardier, and later Airbus; this falls in line
with the proudly-declared protectionist rhetoric uttered by President Trump
during and after his run for office. In the U.K., advances in the fight against
financial crime have been consistently trolled by the underlying reality that,
for whatever reason, the political elite in the U.K. seek to eliminate the
Serious Fraud Office, which has been demonstrated by their endeavour to either
underfund, directly dismantle, or covertly
dismantle the regulatory body that is, by far, leading the fight against
financial crime in the U.K. and around the world in certain cases. The reasons
for these developments are plenty, but the time afforded to either (a) the
successes or (b) the developments of the financial-crime related stories is
extraordinarily telling. Whilst ‘real’ crime is given excessive air time, the
crime of the financial arena is barely discussed – focusing on the airtime
offered to the revelations stemming from the Panama and Paradise papers
illustrated quite clearly that the public will have to look intently for these
stories; they will not be told. The inference is that other crime is more
important for the public to understand and comprehend, but in truth no crime
affects society more than financial crime, particularly when it is systemic in
nature. When the stories are taken in isolation, they can be written-off as a ‘culture’
within a certain industry or amongst a very few individuals, but when taken as
a collective, the impact is abundantly clear. To that end, we will continue now
by looking at the developments within certain industries to achieve that
aggregated outlook.

Industry Developments

Industry in this section relates to developments within
certain sectors, so obviously it will be impossible to adequately review every
sector that has been discussed over the past year. However, some stand out and
the sentiment these analyses offer is one of a battle against a systemic
culture, which is a key element in understand why certain actors in the way they
do, and how one may realistically predict developments – the need to analyse
from within the actual v desired
framework that will be promoted in a forthcoming monograph by this author will
be clear. Starting close to (this author’s) home, the credit rating agencies
have been discussed on a number of occasions, with their transgressive nature
being used as a warning as the ‘Big Three’ endeavour to spread their products
and presence to a number of new markets, like Saudi
Arabia and the developing sustainable finance ‘movement’.
In the banking industry, smaller banks have been facing trouble (like
the Co-Operative Bank and a number of Italian
Banks) whilst larger banks have enjoyed
protection based on their size a.k.a. too big to fail which, as a concept,
was successfully challenged by the insurance industry as demonstrated by AIG’s
removal from the at-risk register in that regard. In the banking industry, there
have been a number of remarkable failures over the last year like the increased
closure of branches, the removal of whistle-blower
protection, widespread
AML failures, and disregard for their victims, but all of these issues have
been buttressed by a political and regulatory foundation that continues to
offer unwavering support, as demonstrated by Trump’s insistence
on deregulation and Philip Hammond’s insistence that we ‘live
in the real world’ in relation to taxpayers paying for the crimes and
failures of the financial elite re RBS, as just two examples. There have been
many other instances, across the financial and commercial sector, that suggest
the current environment is one of appeasement with only one loser; the public.
Whilst this is the undercurrent of a lot of posts here in Financial Regulation Matters, is with good reason. Throughout the
year, there have been countless instances of the sheer disdain from the
powerful for the general public, and the following are just some of the
examples that we have looked at.

Social and Political
Developments

We began the year by looking at the findings of the ‘Financial
Exclusion Committee’ that was tasked by the House of Lords in the U.K. to
assess a number of aspects whereby the financial world negatively impacts upon
society, and they certainly had their work cut out. Just some of the angles
they examined was the remarkable increase in predatory
lending that continues
to plague the vulnerable. In relation to the vulnerable, the issue of the
incredible but unfortunately necessary (in the current paradigm) explosion of
the usage
of food banks across the country (including in Universities),
as well as the simultaneous mental
health epidemic (amongst a whole host of societal issues) was covered
frequently, as too was the disgusting sentiments offered by Jacob Rees-Mogg
with his declaration that the use of food banks was actually ‘uplifting’.
Returning to mental health for one moment, we saw how the increased pressure
that austerity and the effects of an era-defining financial crisis, or wealth-extraction
event was negatively affecting the general public, particularly those in vulnerable
positions or high-pressured position in relation to their life chances i.e.
students
facing an onslaught from tuition fees to exploitative accommodation prices;
the mental health crisis that exists
within the U.K.’s Higher Education system is as clear an indicator as is
necessary. Yet, for all the posts that discussed these issues throughout the
year, the post that responded to the ‘landmark study’ that suggested the
austerity-era policies account for nothing more than ‘economic
murder’ was perhaps the most revealing; to have an extra 120,000 unnecessary
deaths, with an extra 150,000 predicted between 2015 and 2020 all related to
austerity-era policies, on the back of an event that has saw not one person of
any real significance jailed demonstrates the reality of the situation. The
pattern is clear to see; on the back of the largest wealth-extraction event
since the Crash of 1929 and the ensuing depression, it is the vulnerable who
pay the real price. The ultimate question, then, is who is supposed to prevent,
or at least reduce the impact of such a pattern? The answer to that is
financial regulators, and in a number of posts this year we have assessed some
of the major regulatory players in detail.

Developments for
Financial Regulators

We have focused on a number of regulators throughout the
year from within a number of jurisdictions, ranging from China,
Australia,
Europe,
and the U.S.
However, we have spent a lot of time looking at British regulators, with the Financial
Conduct Authority, the Financial
Reporting Council, and the Serious
Fraud Office mostly taking centre stage (in addition to national treasuries
like the Federal
Reserve and HM
Treasury). A common theme that has emerged, rather predictably but still
unfortunately, is that these regulatory bodies are particularly underfunded and intrinsically bound to national
protection, which as we have seen consistently
trumps the requirement to protect the public: regrettably, the impact of a
failed bank or even the perception that would be created if leading financial
figures were to be imprisoned is more important than public protection. The
issue of regulatory
budgets came into focus in August, and what we found was that many, if not
all, regulators are directly underfunded, and continue to have their budgets
slashed, just as their importance continues to develop; the overriding
inference, as directly articulated by Trump and his followers (as is their way)
is that regulation
is bad for business, and that if
one wants economic growth then one must deregulate to achieve it. What is
rarely questioned, in the mainstream at least, is what does this yearning for
economic growth actually mean? What we learned recently, or perhaps had
confirmed, as was brutally demonstrated by Trump’s new tax
laws, is that deregulation is designed to provide a green light for the
financial elite to begin processes that systematically extract wealth from the
system; Greenspan’s efforts were the direct precursor for the financial crisis –
the elite understood the system and executed their respective roles in a
ruthless manner. Whilst the cycles of the economy oscillate away from the
Crisis, the lessons of history have been ignored, yet again, on a grand scale –
the threat of political populism threatened a return to the post-Depression era
that was mired in war and death on a remarkable scale, but the effects of the
post-Crisis era are still to unfold, even a decade later. Reviewing the actions
of regulators in the post-Crisis era has demonstrated that whilst words are
easily spoken, the actions of influential regulators are the same as ever –
they are pro-business and always will be; the situation with RBS and the regulator’s
complicity in helping them to cover up their actions drew scorn, but was
not in the least bit surprising. Whilst one would not to be entirely
pessimistic, the reality of the situation historically
leaves little room for optimism, although what the future holds in terms of the
cyclical development for business, regulators, and the public remains to be
seen.

Ultimately, the year in business has been directly
representative of the global undercurrent that has been developing since the
Crisis. We have seen extensive political upheaval and reconfiguration, with
China and Russia repositioning themselves to increase their influence against
the backdrop of isolation and protectionism from established leaders like the
U.S. and the U.K. What is a common theme, particularly since 2016, is one of uncertainty, and the common adage is
that business hates uncertainty. However, we are seeing business, and
particularly big business, avoid accountability for their actions and, quite
remarkably, we are seeing their interests actually dominating the political dialogue. Yet, is that really remarkable?
In reality, is probably unremarkable,
but the continued assault on the public, and particularly the vulnerable
sectors of the public, continues to astound. It continues to astound not
because of its existence – it is hardly a Marxist view to suggest that the poor
lose out in the current system – but it is the severity, and the unrepentant
rhetoric that astounds, because irrespective of political affiliation it is
surely never acceptable to see nurses, students, and the disabled funnelled
into food banks and made destitute whilst executive pay continues to rise,
criminal prosecutions in the financial arena continue to be confined to the
confines of make-believe, and politicians continue to deflect attention towards
nonsensical issues like the colour of passports etc. Ultimately, it is hoped
that that the assault at least subsides in the coming year to allow for some
much needed relief, in whatever limited form, for those who bear the brunt of
the system – the impending secession of the U.K. from the E.U., and the
continued presence of President Trump in the Oval Office suggest that one may
have to wait for that hope to become reality.

** As it is the end of the first year for Financial Regulation Matters, I would
like to take this opportunity to articulate my sincerest gratitude to a number
of people. I would like to start by saying thank you to a dear friend who
helped to me to develop the blog initially, and encouraged me to continue to
develop it in the early stages, that support was and is very much appreciated.
I would also like to thank my contributors over the year who have kindly written
for the blog and who have helped enhance it considerably. Lastly, but certainly
not leastly, I would like to express my sincerest gratitude for the support the
blog has received over the last year. Having only started in February the blog,
with almost 200 posts, has garnered hundreds of thousands of views and hundreds
of subscribers, and that support has been invaluable as the blog has continued
to go from strength to strength. For those of you that read and subscribe to
the blog, your continued support is very much appreciated and is a constitutive
component of why I continue to critically assess these developing business
stories – your continued support by way of readership, subscriptions, and
spreading knowledge of the blog across your social media platforms will also be
genuinely appreciated, and will help the blog elevate to that next level in
2018 and beyond. To all of you, wherever you are around the world, Financial Regulation Matters wishes you
the happiest of New Years!

Friday, 29 December 2017

On quite a few occasions here in Financial Regulation Matters, we have looked at the issue of
corruption; that subject has taken across a number of industries, ranging from automobiles,
tobacco,
aerospace,
and technology.
In today’s post, the focus turns to the Oil and Gas Industry with news coming
earlier in the month from Italy that one of the ‘biggest
corporate bribery trials in history’ will start in 2019. So, we shall look
at some of the details of the forthcoming case and assess it against a backdrop
of legal action which is, on a global scale, looking to take the fight to
corporate corruption.

Ultimately, there have been a number of positive
developments in relation to the fight against corruption. Using the U.K. as
just one example, the recent successes of the Serious Fraud Office in securing
a £800 million + ‘deferred prosecution agreement’ with Rolls-Royce seemed to be
the heralding of that new era in the U.K., which will have to play a central
role in developing that new era owing to the centrality of London within the
financial landscape. However, whilst on the surface it may look like
developments are being made, there are worrying signs that Rolls-Royce have
been designated as the scapegoat in this regard (although that should not
detract from their transgressions) and that their penalty represents a veneer.
We spoke recently about the political posturing that is currently surrounding
the Serious Fraud Office on the personal
whim of Theresa May and Amber Rudd, and recent news concerning the tobacco
industry makes for worrying reading. It was reported today that senior MPs for
the Conservative and DUP party, the ruling parties in the U.K. by way of their enforced
alliance, have been hosting a
string of receptions, lunches and dinners with
senior members of leading tobacco companies like British American Tobacco and
Philip Morris International. Whilst the news stories focus more
upon the health effects of the companies’ products, the reality is that large international
firms who have been proven to be partaking in bribery and corruption are not
only courting senior political figures (as one would expect) but are having
those advances reciprocated. Whilst the hope in relation to Shell and Eni is
that the case will herald a new era, we know by now here in Financial Regulation Matters that one
needs to focus on action rather than words, and in that regard there appears
to be very little difference. The case will be an interesting legal event in
that it pits exceptionally large multinational corporations against a country
that is heavily dependent upon their business, but can one really foresee
Executives being imprisoned? No. Can one expect to see the Nigerian people have
their $1.3 billion returned to them? Perhaps in some limited form. The obvious
result of this case is that Etete takes the fall, and whilst that may be
justified if certain events are proven to have taken place, the underlying
structure and processes will remain.

Tuesday, 19 December 2017

In this very short post, the focus will be on the
difficulties being faced at the moment by the famous ‘Toys-R-Us’ brand, founded
almost 70 years ago in the United States. Founded in 1948 by Charles
Lazarus, the company would go on to be a huge success, essentially coming
to be synonymous with the children’s toys market; the company has since gone on
to establish itself in countries all around the world, and today’s post will
focus on its U.K. operations, which began in 1985, and the
troubles facing the company as a whole.

It was reported earlier today that rather than demonstrate
the continuance of this success, the British arm of the Toys R Us Company is
facing the prospect of going into administration – the process
whereby an administrator takes charge and attempts to rescue the company as a
going concern. This negative development will, according to reports, put more
than 3,000
British jobs at risk, with the prospect of administration drawing ever
closer after an attempt to reorganise the company was blocked by the Pension
Protection Fund (PPF), the company’s largest creditor, on the basis that
the company is already operating with a £25-35
million shortfall in its pension reserves which, according to the PPF,
would be worsened by the proposed reorganisation. Before a company goes into
administration, it can enter into what is termed a ‘Company Voluntary
Arrangement’ (CVA) which is, essentially, a last ditch effort to reorganise
upon favourable terms – it is this that the PPF has refused to enter into.
Under the terms of their arrangement, the PPF has the right to enforce a £9
million payment, and whilst Toys R Us UK proposed to pay only £1.6 million, the
PPF is standing firm; the impasse comes because, quite simply, Toys R Us UK
cannot afford to pay any more. Usually, the obvious resolution would be for the
subsidiary to receive assistance from its American parent, but in September of
this year the parent company filed
for Chapter 11 Bankruptcy protection, with it owing nearly $5 billion.
Therefore, regardless of whether the company is suffering because it is ‘dated’, under pressure
from online retailers, or mismanaged, it is likely that we will see Toys R Us,
in the U.K. at least, go into administration. However, it is worth asking what
this really means.

Technically, it means that the company needs to be
reorganised, and that a professional administrator, with all the tools they
have at their disposal – including being able to institute a moratorium
which means an instituting of a freeze on all claims against the company whilst
it is being reorganised – is best placed to perform that reorganisation.
However, in reality, the processes that Toys R Us are facing are critical
junctures in a company’s life-cycle, and ones that not many survive. Research
suggests that more than two-thirds
of businesses going into administration never make it out, with around 10%
surviving and remaining active for an extended period of time; between 2011 and
2016, ‘Company Watch’ found that of just over 2,600 administrative procedures
that were completed in that time, 2,344 companies were eventually liquidated,
with only 263 using the CVA process to their advantage i.e. surviving the
process. Whilst there are some small caveats to these figures – some companies
are dismantled and redeveloped through a process called pre-pack
administration – the point still stands that the U.K. is about to lose
another recognisable brand, and thousands of employees are facing redundancy,
just like those of BHS,
Jaeger, and the remarkable amount of stores declaring mass store closures
across the U.K. and the U.S. The question, then, is whether these ‘rescue
culture’ procedures need to be redesigned, or even reimagined.

Ultimately, that is an ongoing development that is being
tested all the time as large and recognisable businesses face the onslaught of
the post-Crisis environment; despite news of record
highs in stock markets and whatever else is being used to declare economic strength,
the world does not right itself so soon after such an invasive attack.
Unfortunately, it is hard to imagine that Toys R Us will be the last company to
fail in the near future, which continues the distress felt by those who usually
suffer from the follies of the financial elite – the general public. Whilst the
process of rescuing companies needs to be reimagined, if that is even desired,
it is likely that any positive effect in that field will not come in time to
save thousands upon thousands of jobs, and the most recognisable of brands.

For more on this subject and the continued study of these
rescue-culture procedures, please do follow @ChrisUmfreville, a researcher
who focuses on developments in this area.

Monday, 18 December 2017

The final post today looks
at the company behind the massive HS2 infrastructure project that will see some
of the U.K.’s largest cities connected by a new high-speed railway system. We
have looked
fleetingly at the project before when we focused on the travails of
Carillion, just one of the firms tasked with seeing this large-scale project
realised. However, whilst Carillion is experiencing a period of difficulty at
the moment, the HS2 Company itself has this week been thrust into the limelight
because of its organisational structure, and its compensation to key
individuals. So, in this post, we will look at the developing story and assess
the development of this integral project.

High Speed Two, or HS2, is
the name given to the large-scale infrastructure project that aims to connect
Britain’s largest Cities by way of modern high-speed rail links and is
coordinated by the HS2 Ltd Company that is funded by grant-in-aid
from the Government. The project will see eight different cities connected,
with the stated aim being to ‘[rebalance]
our economy long before the trains start running’; the Company predicts
that HS2 will create around 25,000
jobs and fuel economic benefits totalling over £103 billion. However, ever
since the project was first declared, there has been a number of criticisms and
objections, relating to such aspects as the trains
running through certain areas, the structure and plans of the project, and the
spiralling costs, and recently the focus has turned to the financial side
of the project, with remuneration being chief amongst those. It was reported last
week that MPs were growing increasingly concerned certain staff members being
vastly overpaid by the Company, with some going as far to call for legal action
to be taken by the Government. So far, the most contentious element in this
regard has been the fact that the Company has paid out £2.76 million to 94
individuals in relation to redundancy payments, despite there being a statutory
cap of £1 million, something which has been labelled by MPs on the Public
Accounts Committee as ‘a
shocking waste of taxpayers’ money’. Yet, over the past week, the plot has
continued to thicken.

In one of the first posts here
in Financial Regulation Matters, we
looked at what seemed to be a culture of fraud, bribery, and essentially financial
negligence within one of the world’s most recognisable brands – Rolls-Royce; in
September 2016, Simon Kirby joined Rolls-Royce as its Chief Operating Officer,
with the firm declaring that the appointment was designed to ‘drive
operational and financial performance across the business…’. With MPs
concerned that Kirby ‘has
not been held to account for his actions’, the pressure is continuing to
build for Kirby and his new employer, as the smell of financial negligence will
certainly be unwelcome given that the firm is currently operating under the
largest ‘Deferred
Prosecution Agreement’ ever appropriated by a British agency (the Serious
Fraud Office) for bribery, fraud, and all-around financial negligence.
Nonetheless, whilst Kirby waits to find out whether that pressure results in
action, the knock-on effect for HS2 is severe.

In reality, the HS2 project
is an extremely expensive and precarious project, being executed at precisely
the time were increased expense and precariousness are not at all desired. In
this era where austerity continues and the country is facing an increasingly
uncertain economic future, projects such as HS2 need to be delivered with the
utmost integrity, and today’s latest developments represent a hammer blow to
that ideal. If, and one suspects it is more than likely, investigations
continue and find systemic issues, it
should be the case that the organisational elements of the Company are
thoroughly re-examined and altered accordingly; however, the reality is that
the Company will likely need much more than the £55 billion that it requires,
and this is the cause of the Government’s push to encourage foreign
investment from the likes of China – the question then is do the Government
dare tackle what may be systemic fraud and financial negligence in light of the
proposed reality that the project will need even more money from the public
fisc and/or foreign governments? The likely answer to that question is a
resounding ‘no’, and it is for that reason that Simon Kirby may not have
escaped the clutches of justice on this occasion; simply put, his actions
regarding the damning email make him the perfect ‘fall guy’ for what may be
systemic issues within the HS2 project.

This short post reacts to
the news today that banks and building societies are being enlisted by the
British Government to check the immigration status of millions of people and
take the appropriate action – essentially putting banks on the front-line in the
push to reduce the levels of people living in this country without the
appropriate leave to do so. The obvious question to be raised by this move is
whether the banking system is the appropriate vehicle to meet this objective,
and what may be the connotations for it doing so.

The first of these issues
is that for poorer people who may fall into this category, even if incorrectly,
there will be very little protection offered. There will be very little legal
assistance available to those incorrectly caught by this system, with
complaints likely to be resolved in a less than timely manner. Secondly, this
system again demonstrates the Government’s commitment to outsourcing key
policies to the private sector, with banks being forced into the role of
gatekeeper in a new manner; the fundamental relationship that exists between a
for-profit organisation and society is being constantly reimagined, with little
regards for the mechanics that lay underneath – is it really appropriate to
expect a for-profit organisation to devote adequate resources to performing
this task, especially when the likelihood is that not doing so and receiving
financial penalties will likely be much more profitable then actually
allocating the necessary resources; this extra role on top of anti-money
laundering tasks mean that it will be more prudent, technically speaking, for
banks to effectively blacklist more
people than it needs to, rather than taking the chance of falling foul of the
regulations. If there is very little recourse available to blacklisted
individuals who may be blacklisted incorrectly, then the dynamic that has been
put in place in relation to checks and balances, and associated penalties, will
need to be thoroughly examined. Ultimately, it is likely that this new policy
will cause a lot of upset and, once again, see the public pay the price for the
public-private partnership that is being consistently developed.

In the first of a number of
posts today, this post looks at some of the noises emanating from the financial
elite within the U.K., particularly with regards to Brexit. It should come as
no surprise that the decision to leave the E.U. has caused anxiety amongst
business leaders within the City, and recent political developments have not
made a positive impact in that regard. So, in this post, we shall look at some of the
concerns that are being raised, and the impact that certain developments may
have upon the City, and also the British society moreover; ultimately, the
question developing is how the secession will play out in terms of finding a
balance between the decision of the (very slight) majority of the electorate,
and business within the U.K.

The first development that
needs to be examined is the political manoeuvrings that took place last week
when, in Parliament, the Government saw its attempt to ‘promise
to give assurances’ on a Parliamentary consultation over the final exit
deal enshrined in law, which has an impact upon the perceived authority of the
Conservative government. The effect of this is that the perceived authority of the Government to deliver a fair and
developed deal for Britain has been fundamentally reduced, which then has a
clear knock-on effect with respect of the faith in their ability to do so; the
addition of extra steps before the secession is finalised, by way of decisions
required by the European and British Parliaments, are said to be indicators
of the near-certainty
of a ‘soft-Brexit’ being adopted. Essentially, the vote represented the rejection
of the push for a ‘hard-Brexit’ by what are being called ‘Tory-rebels’,
with the Daily Mail inexplicably
stoking tensions (and violent ones at that) with their rhetorical ‘Proud
of Yourselves?’ front-page headline; the latest on a string of revolting
journalistic declarations (one is reminded of their ‘Enemies
of the People’ headline). However, the vote signifies a concerted attempt
to reign in the extremist elements that seek a hard and pure Brexit, and over
the weekend the City sought to continue this movement.

One of the leading City
lobbyist groups – UK Finance
– expressed their concern at the suggestion that the British Government was
seeking a ‘bespoke’ agreement with the E.U. upon its secession, with the
agreement that exists between the E.U. and Canada apparently being used as the
template. Whilst the Chancellor of the Exchequer, Philip
Hammond, declared over the weekend that the aim was
to have a bespoke arrangement but not in the same vein as the Canada-E.U.
arrangement, Michel Barnier – the E.U.’s Chief Brexit negotiator – was adamant
that the U.K. would not
be allowed to receive the perks of E.U. membership once it leaves; the discussions
have now moved to developing a transitionary arrangement that would see the
U.K. remain within the single market and under the auspices of the European
legal framework for a period of two years after secession – something with
Chief Brexiteer Jacob
Rees-Mogg has suggested would be a negative, resulting in the U.K. becoming
an ‘E.U.
colony’. Nevertheless, the financial elite in the U.K. have made clear that
the Canada-style arrangement would certainly not be optimal for British
business, with the lobby group declaring that the Government must place the
City at the very heart of its negotiations if the City is to survive such an
impactful era. In reference to the Canada-style arrangement, the lobby group
rightfully notes that the
difference between the two situations is rather obvious – the arrangement
with Canada was developed from a standing start, whilst the arrangement between
Britain and the E.U. is intrinsically rooted in over 40 years of collaboration;
simply put, one system is not translatable to the other. Whilst the lobby group
praises Theresa May for advancing the negotiations, it is clear the
cross-border movement of financial service provision, amongst many other
things, is vital to the continued
health of the financial markets of the U.K., which seems rather obvious. Yet,
underlying all of these discussions, albeit not very subtly, is the
understanding that business needs certainty
to thrive; whilst uncertainty can be profitable in the short-term, in the
long-term it is almost cancerous to business.

This uncertainty is
beginning, although in reality it started immediately after the vote to leave,
to have an impact beyond financial borders. The Bank of England, discussing the
results of a survey of over 6000 British households, note that over 35%
of British households now believe that Brexit will cause significant economic
damage to the country, up from 20% just after the referendum result was
announced. Whilst the Bank of England have chosen to focus on more short-term
impacts recently in terms of confidence, statistics such as these provide
even more evidence that, as discussed previously here
in Financial Regulation Matters, this
E.U. referendum was nothing more than a botch job; a second referendum, even at
this stage, would surely garner either (a) a different result or (b) a much
higher and more representative turnout. It was affirmed recently that London
still holds its place as one of the financial centres since the decision
to leave the E.U. was taken, but the move by some of the largest financial
players to make considerable moves into Europe recently is denting confidence –
if confidence and certainty are two major components of the lifeblood of a
successful economic system, the British financial marketplace is in short
supply at the moment. The effect of all this is that one really must ask a
broader and more abstract question.

Ultimately, for Britain to
retain its standing on the world stage, particularly in relation to the
financial marketplace, the softest-Brexit imaginable is optimal. However, that
goes in the face, presumably, of the decision taken in 2016. Therefore, the
decision taken by the British electorate needs to be dissected. The first
aspect to question is the extent to
which the electorate wanted to leave the E.U., and unfortunately that cannot be
known; whilst protagonists like Nigel Farage suggested that British people
wanted an absolute secession, can
that really be said to be the case? Or is it more likely that voters wanted
certain elements of the U.K.’s relationship with the E.U. rearranged, like
immigration for example. One may be forgiven for thinking that if certain
elements of the secession were put on the table before the vote took place,
then certain aspects of the relationship would have been highlighted more than
others, but what was proposed has not been delivered as of yet, and that is
because in reality it cannot be. In reality, it is the E.U. that holds the
advantage in the negotiations, and that is mostly because of the importance of
the City to the prosperity of the U.K.; a cherry-picked arrangement will cause
a regressive precedent for the E.U., and a very soft-Brexit will likely damage
the authority of the Conservative Party, probably beyond repair. Ultimately,
the trajectory of these negotiations has already been set, it is probably just
the case that certain people have not yet accepted it – an extremely soft-Brexit
is the only possible result, because the U.K. cannot afford nothing else. So,
after such political, social, and financial upheaval, the U.K. will still be
bound by European laws, still be bound by freedom of movement, and it would
have paid tens of billions for the privilege – the ignorance of the study of
referenda will be a costly for the British society.

Monday, 11 December 2017

In this third and final post of the day, we will take a
brief look at a proposal being advanced today by the Labour Party, which
attempts to convey their commitment to redistributing wealth across the U.K.
rather than its current concentration in the South-East of the Country. This
review will only be brief because, given the political landscape, it is all
that it can be at the time of writing; however, whilst the suggested aim to
redistribute the economic dynamic across the Country is hardly surprising given
the stated aims and objectives of Jeremy Corbyn’s Labour Party, in reality the
question this suggestion raises is two-fold: is the Party operating on any
solid basis of reality, and then do they recognise the reality of the problems
i.e. their root causes, or are they focusing on and subsequently adding to the façade
that serves to preserve the current power structure? Surely, as recent and historical
evidence suggests, anything other than a ‘root and branch’ redevelopment will
have very few lasting positive consequences.

The Shadow Chancellor, John McDonnell, has commissioned
consultants to review potential options available to the Party if it wins the
next General Election, and one option that is being promoted today is that the
Bank of England, located in the City of London since 1694, should be relocated
in whole or in part to Birmingham, because the current base is ‘unsatisfactory
and leads to the regions being underweighted in policy decisions’. The
prospective move would accentuate the development of the ‘National Investment
Bank’ and the Strategic Investment Board’ in the city and would represent the
development of a new ‘economic
policy hub’. Whilst the suggestion so far is that the move would provide
for a visible representation of the Party’s determination to ‘promote
growth and a rebalancing of the economy’, the real question is ‘is that enough’
to uproot a British Institution for a ‘representation’?

Of course, the answer is ‘no’, because whilst HSBC and
potentially Channel 4 may be moving to the city, it is a different prospect
entirely moving the Bank of England. The simple reason is that uprooting the
Bank of England, so soon after the Country leaves the E.U. and faces the
prospect of battling for international trade deals which will be underpinned by
the perceived authority of the City of London as a financial centre, means McDonnell’s suggestion
will remain on the drawing board irrespective of whether the Party comes to
power or not; naturally, it is one thing suggesting policies from the
side-lines as opposed to actually governing. Yet, whilst this counteracting
point is the obvious one to make, the more obscure point is what effect would
moving the bank actually have on ‘rebalancing’ the economy? The divergence between
basic economic indicators like wages
and employment levels in both the North and the South of the country are clear
for all to see, the political battle that is being fought on the basis of
the development of the ‘Northern
Powerhouse’ suggests that devolving power and authority may fulfil the aim
of reducing the divide, but in many instances it may not. Theresa May was
earlier this year forced to respond to critics that accused her of paying lip-service
to the ideal, and whilst Labour supporters may not like hearing that their
Party has similarities to the Conservative Party, McDonnell’s suggestion implies
that this is the case; of all the things to be done, is relocating the Bank of
England a worthy option? Is it even worth us discussing based upon the fact
that diluting the influence of the City of London in the wake of Brexit is a
non-starter? Whilst this author does not support either Party, it is worth
stating that to rise to power the Labour Party should really seek to be rooted
in realism to provide a realistic alternative to the Conservative Party who
operate in a rather different way. Ultimately, the more noises we hear from the
Labour Party about how they will govern whilst they are on the side-lines,
particularly with respect like these calls today, will only serve to undermine
their chances – only root-and-branch and consistent change, over a long period,
will reduce the divide between the North and the South.

In the second post today, the focus will be on the Serious
Fraud Office (SFO) and its navigation of particularly choppy political waters.
We have looked at the SFO on a number of occasions and in May this year we
looked at how the Prime Minister was seemingly
zeroing in on the SFO in the accumulation of what is an almost-relentless
campaign to dismantle the agency. However, in news today, it appears that the
new anti-corruption strategy developed by the Home Secretary – Amber Rudd –
seeks to incorporate the SFO with the
National Crime Agency (NCA) and not replace it, as had been suggested
previously. However, what can the SFO make of this latest development?

We have discussed the SFO on a number of occasions, with
most references being to victories that the agency has scored, particularly in
reference to the large Deferred Prosecution Agreement arranged with Rolls-Royce.
The SFO has a number of other ‘victories’
to its name (e shall not revisit the discussion of whether DPAs are victories
or not here) but that had not stopped the Prime Minister renewing an old
vendetta against the SFO which has seen her attempt to dissolve
the SFO in favour of the NCA since her time in office as Home Secretary.
Yet, the current Home Secretary provided some potential relief for the recently
successful but still beleaguered agency, although that sense of success was
rocked recently with a scalding
assessment of the agency’s competency regarding its usage of inappropriate
witnesses during a high-profile case. Today, Rudd announced plans for a new ‘National
Economic Crime Centre’, which will see the Centre based within the NCA and give
it the power to task the SFO with conducting investigations regarding ‘the
worst cases of fraud, money laundering and corruption’. Not only is the
Home Secretary concerned with tackling financial crime, but she is also
concerned with rooting out corruption in key social areas like within policing,
prisons, and the Border Force, apparently. Furthermore, Rudd stated that the
new initiative was not just designed to counter large-scale financial crime,
but also small-scale
everyday financial crime like phishing scams etc. However, whilst the media
report this in the form of either a. the SFO has been spared or b. the
Government is now getting serious over corruption, a closer inspection into the
wording used by Rudd suggest something much more sinister.

The Prime Minister has plenty on her plate at the moment,
and wading into a public battle with an agency that has scored some impressive ‘wins’
recently is not only bad politics, but could potentially see the barometer
swing away from her party in upcoming elections. Yet, whilst this author has
many opinions of Theresa May, it is clear that her doggedness could never be
underestimated, so with that in mind it is worth taking Rudd’s proclamation
today with great care. Rudd stated that the NCA will have the power to task the
SFO with investigating serious fraud, but in reality it already does this – it is part-and-parcel of its purpose. Whilst
onlookers have been quick to declare that ‘it
is reassuring that the Government appears to have abandoned its earlier plans
to abolish the SFO’, in reality the Government have taken the first step to
incorporating the SFO into the NCA, just as May had promised she would.
However, by repackaging the move in the way that Rudd did today, in line with
her unwavering allegiance to the Prime Minister, Theresa May has set the plan
in motion and received the support of
those that were so adamantly against her when she pledged to do this very same
thing before the election. Depending on what media outlet one reads, if at all,
one could be forgiven for falling into the trap of believing that she and her
Government are incompetent
and confused,
when in fact they are anything but.

In the first of three brief posts today, in order to stay
abreast of a busy day in the financial arena, we will begin by looking at news
that is coming out of the Department of Justice in the U.S. The news, that the
DoJ is changing course on its agreement put in place to deter further
transgressions by the multinational bank, is excellent news for the bank but,
perhaps, sends a message about the pro-business sentiments that are emerging
all the time under the Trump Administration.

On two specific occasions here in Financial Regulation Matters, we have looked at HSBC in particular
with reference to their almost infamous track record when it comes to financial
crime, particularly money laundering. It is no secret that the large
multinational bank has been involved in some particularly damaging news
stories, including having to pay a £1.9 billion fine to U.S. authorities in
2012 for ‘exposing
the U.S. financial system to money laundering, drug (and) terrorist financing
risks’ and also the bank’s connection to the so-called ‘Global
Laundromat’, which has seemingly been lost to the news cycles. However,
today, the focus is on the first of these two instances, with the suggestion
emerging today that the DoJ will be filing a motion in New York that will see
the ‘sword
of Damocles’ – the charges attached to the Deferred Prosecution Agreement
(DPA) that forced through the fine in 2012 – removed from over the head of
HSBC. Many news outlets are carrying this story, and the Financial Times makes
quite a point of indicating just how happy Stuart Gulliver (outgoing CEO), John
Flint (incoming CEO), and Mark Tucker (non-Executive Chairman) will be with
this result, with Gulliver proudly declaring that ‘HSBC is
able to combat financial crime much more effectively today as the result of the
significant reforms we have implemented over the last five years’. So, it
would appear that Gulliver’s jubilance is deserved, given that it is surely the
case that he is right because, quite frankly, the removal of the DPA must
surely indicate the accuracy of the statement; regular readers of Financial Regulation Matters will know
that we cannot be so fast to accept what we see, and the same principle
unfortunately applies here.

It was only at the beginning of this year when the FCA were investigating
HSBC over its Anti-Money Laundering (AML) procedures over concerns relating to
the bank’s thoroughness in this all-important sector, and it was only in 2016
that the lawyer appointed to HSBC to monitor its compliance with regulations as
part of the DPA expressed ‘significant
concerns’ over its ability, and willingness, to comply with a range of
regulations like AML regulations. Yet, this is seemingly not enough evidence to
remain vigilant, and if the DoJ does indeed decide to lift the sword of Damocles,
then it is essentially releasing HSBC from the continued restraint that the DPA
brings – if it was showing concerning levels of compliance with a DPA-associated Lawyer on board, what will it do without the continued presence of a 3rd
party overseer? The optimist will agree with Gulliver, that improvements have
been made, but the pessimist will argue that there is little evidence of that;
the continued transgressions make the optimist’s argument almost null and void.
However, this ignorance of evidence is a common theme in the post-2016
political environment, and the willingness of the DoJ to intervene will be a
clear signal that the U.S. is open for business and does not seek to operate
conservatively based upon recent damage. It is, unfortunately, a signal that
the marketplace will respond to, and not in a socially-positive manner.

Tuesday, 5 December 2017

Today’s post acts as a small review of two specific news pieces
that broke today concerning two financial regulators in the U.K. Whilst one
would have had to have been quick to spot these stories, with both falling down
the list of financial news stories rather quickly, each has particularly strong
knock-on effects, but for differing reasons. So, in this post, a little more
detail will be added as both of those stories represent the latest iterations
of themes that have formed the basis of a number of posts here in Financial Regulation Matters.

The first story is concerned with the infamous report
conducted by the FCA regarding the actions of RBS and its ‘Global Restructuring
Group’ (GRG). We have covered this issue on a number of occasions, and heard
most recently that whilst the FCA has been busy investigating and punishing a
number of firms of their failures, firms like BrightHouse and Equifax, their
hesitancy to take any serious action against RBS has garnered plenty of
justified criticism – although it is worth noting that, in general, the rate of
fines being imposed by the FCA is steadily
reducing (it is not suggested here, of course, that this is because of
increased standards in the marketplace [!]). Even in response to Governmental
pressure via the Treasury Select Committee and its new Chair Nicky Morgan, the
FCA refused to bow to the pressure and released just a summary
of their report on the investigation; yet, today, we were given a reason as
to why this was. The official story being developed is that the FCA could
not reveal the report in full
because of fears over counter-litigation from those involved – a process known
as ‘Maxwellisation’
which is the process whereby those accused in an official report have to be
notified and consulted first. Internal Board minutes reveal that the ‘external
counsel’s advice led [the FCA] to the conclusion that publication of the final
report would expose the FCA to an unacceptable risk of successful legal action
by current/former RBS managers’. So, what does this mean? Well, it
essentially means that the process will be incredibly long-winded and, likely,
will be downplayed as much as humanly possible to reduce the exposure of RBS, a
majoritively state-owned business, from major investigation. However, it
denotes something much more important – if Maxwellisation prevents these reports
from being publically aired, which as a process is justifiable in theory (i.e.
what if those accused were themselves not guilty?), then maybe we should be
asking a different question – maybe, rather than looking to air an
investigation, the FCA seeks to criminally
prosecute those responsible for breaching a multitude of duties that they
owe to connected parties; then, the issue of Maxwellisation goes away, because
those accused would have to answer for their alleged wrongdoing in a court of law.
Obviously, that is a fanciful suggestion in this arena, but the principle still
stands; we are being faced with the prospect that those in the financial arena
are, almost, immune to punishment.
So, as we move on to the second story, a question that links the two may be ‘how
may we protect against Executive excesses and misdeeds? One answer may be to
have employee representatives on Boards of companies to provide for more
balance, representation, and diversity in the decision-making organ of a company.

That idea is not based upon a speech from Jeremy Corbyn, or
anyone else fundamentally associated with ‘the left’, but from the leader of
the Conservative Party and Prime Minister, Theresa May. Speaking in May of
2016, the then Home Secretary was developing her pitch to take over the
Conservative Party on a number of political platforms; one of which was her
pitch to make the Country ‘work for all’, and in turn to increase social
mobility – whilst it is obvious to anyone who cares to notice the widespread
usage of foodbanks under her premiership, the abdication of the Government’s ‘Social
Mobility Tsar’ and his entire team on the basis of his perception of ‘indecision,
dysfunctionality and lack of leadership’ in number 10 should come as absolutely
no surprise. Another of her key platforms was to ‘completely, absolutely,
unequivocally’ put the Conservatives ‘at
the service of working people’ and one way in which she planned to achieve
that was to instil workers on company boards and mandate that shareholder votes
on executive pay were to become binding, rather than advisory. Unless one has
been living under a rock, or is an ardent Conservative, it should come as no
surprise once more to hear that ‘Theresa
May has backed away from plans set out in her Tory leadership campaign to put
workers on company boards’. However, this is to be expected because, quite
simply, why would she keep her promise?
There is no consequence, politically, to breaking promises (think of the Big
Red Bus). Yet, today, the Financial Reporting Council (FRC) waded into the
minefield by seemingly confirming Theresa May’s U-turn by declaring that the revised
UK Corporate Governance Code will have three
options for companies to heed the advice of employee representatives, with
all being based upon the comply-or-explain principle (the
consultation phase continues up until February 2018). Those three options
include assigning a specified non-Executive Director to represent employees,
creating an employee advisory council, or to nominate a Director from the pool
of employees; these sound good in theory, but the backing-down away from May’s
pledge is the real headline here. Whilst the FRC discusses how it may go about
encouraging this behaviour, and increasing the intake and representativeness of
under-represented peoples within companies, the sheer ineffectiveness of the
FRC is likely to garner any serious results in this regard.

Ultimately, these regulatory developments signal the
position of the regulator – they are fundamentally constrained; to say that
these regulators are hamstrung is to downplay their position. On many occasions
this author has called for regulators to be braver, more direct, and more
honest about their efforts to make a serious impact upon these dynamics that
cause so much harm, but in reality it is worth asking what is it they can
actually do? Do they have the systemic support to put RBS Executives in the
dock? No. Do they have the support to enforce
that workers are sat on every board in the country? No. Do they have the
support to provide for anything more than token penalties in the forms of fines
that companies write off in a matter of hours/days/weeks? No. So, whilst it is
right that regulators are critically examined for their role with respect to
these corporate failings, it is worthwhile remembering that with a systemic
support network based upon justified,
proportionate, and righteous punishment, these regulators
will never be much more than official wrist-slappers, regrettably.

Monday, 4 December 2017

In today’s post we will turn our attention to the role of
the Investor in the global financial dynamic, as although we spend plenty of
time here in Financial Regulation Matters
looking at the iniquities of the marketplace via the actions of banks, rating
agencies, governmental agencies and financial regulators, the role of the
investor is just as important, if not more so. Whilst an assessment like this is
always valid, this post is reacting specifically to a report last week that
investors are returning to the products that brought the world to its knees in
2007/8, all for increased returns. So, in this post, this issue will be
assessed because, on a number of occasions here we have spoken about the
potential rise of the ‘responsible investor’ since the Crisis; perhaps we
should be more careful with such discussions in the future.

The role of the investor in relation to the causation of the
Financial Crisis is no secret, with a number of analyses choosing to focus upon
it specifically. In one Handbook, an
analysis that was undertaken to describe the processes of investors in relation
to the cycles surrounding the Crisis suggested that the pre-Crisis phase is
dominated by the sentiment that a crisis cannot happen, and then the
realisation that it can usually encourages a systemic shock that prevents
further abuse moving forward (for a certain time anyway). However, whilst this ‘financial
amnesia’ may seem obvious, the analysis suggests that the difference with
this Crisis was that the extensive Quantitative-Easing (QE) programme has
essentially removed
that period of shock and consequence, which ties in neatly to the theme of
this post. Another analysis suggests that what lies at the core of this
hazardous dynamic between the investors and the financial system is that once
investors, i.e. ‘retail’ investors, are differentiated from ‘sophisticated
investors’ (SIs), the protections put in place are stripped away on the basis
of an entrenched belief that SIs can
police their own markets. It is likely for this reason that, in the
aftermath of the Crisis, the Chartered Financial Analyst Society in the U.K.
argued that fund managers and financial advisors should be forced
to study financial history to reduce the likelihood of financial crises.
Whilst this is obviously a good idea in theory, it is clearly a non-starter in
reality; yet, this claim brings forward two issues: firstly, enforcing SIs to
study is symptomatic of a system that cannot enforce strict regulations;
secondly, allowing SIs to police themselves ignores one vital component – what drives
an SI?

We have looked on a few occasions in Financial Regulation Matters at what drives the SIs, and we have
looked specifically at what some are suggesting the future will be in relation
to this question; one such post looked at the chances of an increased
sensibility to social responsibility. Yet, whilst discussions like those
are usually related to the aim of trying provide some positive or hopeful
analyses, the cold hard truth is that SIs are only interested, principally, in
one thing – the highest returns possible. The report from last week assesses
this, and its opening gambit is revelatory: ‘investors
are driving a revival of structured credit products that were a hallmark of the
boom years before the financial crisis’. However, this report in the Financial Times on the 27th
November is certainly not the first warning about the direction that most SIs
are heading in, with reports
from much earlier in the year confirming exactly the same worrying trend.
The story, essentially, is an entirely familiar and predictable one, with SIs
being seduced into re-termed structured finance products – the new ‘hot’
product is the ‘bespoke
tranche’, which is simply a collection of credit default swaps (CDS) tied to
the risk of corporate defaults – so nothing new here to report. So, the
products are the same, and also the reasoning for why SIs are being seduced
into these shaky fields are the same too; understanding the environment
surrounding an SI is crucial to predicting their actions. Today, the situation
is that so-called ‘junk bonds’ are providing particularly low-yields, and that
corporate bonds are not providing the high yields that large investors
apparently ‘need’, although this is another issue entirely. Whether it is
investing in ‘bespoke tranches’, plain old Collateralised Debt Obligations, or
now ‘Collateralised
Loan Obligations’ – the collection of leveraged loans – the story remains
the same; ‘with
junk bonds at such low yields where else can you go? It pushes investors into the
securitised world’.

Worryingly, the environment surrounding SIs seems to be deteriorating,
not improving. One report discusses how a wave of fixed-income debt procured in
the immediate aftermath of the Crisis is now maturing, with an estimated $1
trillion about to mature which leaves investors with the need to re-invest
and find similar levels of yield on their investments. If that scenario comes
to pass, which the research suggests it will, then investors will be sitting on
an incredible amount of money, which is essentially blood in the water for the
usual protagonists. It has been noted that, with respect to ‘bespoke tranches’,
the large SIs have been unable to partake up unto this point because, quite
simply, the leading
credit rating agencies have not yet rated them – the dynamic is,
irrespective of the efforts of post-Crisis regulation with respect to rating
agencies, that SIs are still reliant upon the ratings of the agencies
(internally, if not implicitly externally). So, as we can see… the scene is yet
again set.

Ultimately, there is a justified fear emerging that a
perfect storm is brewing. SIs will have an incredible amount of money that they
need to invest (hoarding that money will garner no returns), safer and more
regulated products are producing extremely low yields, and all that is needed
is for the rating agencies to sign-off on the creditworthiness of these
incredibly complex products and that mound of money can be injected into this
specific system. What can we deduce from all of this? Well, the first thing is
that the suggestion that finance professionals be forced to read financial
history is probably the most appropriate, albeit unrealistic proposal on
record. Secondly, the regulations of this institution or that institution, of
this process or that process, of this product or that product, is essentially
closing the door once the horse has bolted; the real focus needs to be on the
dynamics that are inherent within the investment process. There are reasons why
the blinkered pursuit of high yields exists, but in essence the true reason is
a systemic one – the modern capitalist structure determines that everyone
should be involved in the process to make money as fluid as possible for high
finance; the pension schemes that exist in workplaces up and down the country
are a way to mobilise the public’s money, with the motive of the public then
being to maximise their retirement pot – how many employees would, in reality,
be happy with their pension being
slightly limited in the pursuit of sustainable and responsible investing
practices? It is not the fault of these savers, really, because their savings
from their employment have a tangible and real property attached to them,
whilst for SIs they are just numbers on a screen. Yet, it may be the savers’
fault, because if they all withdrew their pensions at once, SIs and Governments
would have to take notice and respond. The conclusion is, however, that it is
simply safe to continue as is, lurching from crisis to crisis, acknowledging
but never truly learning from the past – what is needed is a radical action to
be taken for someone influential, as a group, to fully commit to the ideal of
sustainable and responsible investing; whether that happens anytime soon, in an
era where individualism and uncertainty reign supreme, is doubtful.

Contributions are welcome to this blog. If you would like to contribute regarding any area of financial regulation, then please feel free to email me and submit your blog entry. The content should be concerned with financial regulation, and why it matters, but this is broadly defined. The blog is open to all who are professionally concerned with financial regulation, which may range from an Undergraduate Student interested in writing on the subject, to Professors and industry participants.